Oil slid towards $76 on Thursday, deepening its descent from an all-time high the previous session as U.S. refiners raised fuel output to the highest level in nearly a year.
U.S. crude lost 14 cents to trade at $76.39 a barrel by 8:00 a.m. EDT, after earlier falling more than $1 to $75.52. The U.S. benchmark shed 2.15 percent, or $1.68, on Wednesday.
Before the tumble, U.S. oil sped to a record high of $78.77 shortly after weekly oil inventory data on Wednesday showed crude stocks had dropped nearly 10 times more than expected.
But the focus soon shifted to an un-seasonal build in gasoline stocks that sent the contract down 3.6 percent.
London Brent crude was off 18 cents at $75.17, well below its peak of $78.65 last August.
The U.S. oil market has finally turned a seasonal corner, said Antoine Halff of Fimat energy.
The data's twin takeaway is clear: tightness in global crude stocks is quickly spreading to the United States... At the same time, recovering throughputs are causing U.S. crude and product stocks to rebalance.
An unexpected 600,000-barrel build in gasoline stocks and a rise of 2.8 million barrels in distillates came as U.S. refineries ran at their highest rates in 11 months.
Analysts expect further declines in fuel stocks as refiners ramp up and OPEC holds tight on supplies, but crude inventories in top consumer the United States for now remain ample.
While impressive, the draw still leaves an overall comfortable crude inventory picture in the short run -- U.S. crude stocks in this week's data still end above the upper end of the five-year range, said BNP Paribas.
Some say the sharp price declines may presage a downturn.
When the correction starts, it could go very quickly, said Olivier Jakob of Petromatrix. Going back to $60-$65 is not that far-fetched.